Sunday, September 13, 2015

The banking criminals exposed.

Jesus College, Cambridge hosted, once more, the world’s
leading Symposium on Economic Crime, and over 500 distinguished speakers and
panellists drawn from the widest possible international fora, gathered to make
presentations to the many hundreds of delegates and attendees.

This Symposium has indeed become an icon among other
international gatherings of its knd and over the years, it has proved to be
highly influential in the driving and development of international policy aimed
at combating international financial and economic crime.

What became very quickly clear this year was the general
sense of deep disgust and repugnance that was demonstrated towards the global
banking industry.

I can say with some degree of certainty now that a very
large number of academics, law enforcement agencies, and financial compliance
consultants are now joined, as one, in their total condemnation of significant
elements of the global banking sector for their organised criminal activities.

Many banks are widely identified now as nothing more than
enterprise criminal organisations, who engage in widespread criminal practice
and dishonest conduct as a matter of course and deliberate commercial policy.

Speaker after speaker addressed the implications of the
scandalous level of PPI fraud, whose repayment and compensation schedules now
run into billions of pounds.

Some speakers struggled with the definition of such
activity as ‘Mis-selling’ and needed to be advised that what they were
describing was an institutionalised level of organised financial crimes
involving fraud, false accounting, forgery and other offences involving acts of
misrepresentation and deceit.

One of the side issues which came out of this and other
debates, was the general and genuine sense of bewilderment that management in
these institutions concerned, (and very few banks and financial houses have
escaped censure for this dishonest practice) have walked away from this orgy of
criminal antics, completely unscathed. The protestations from management that
these dishonest acts were carried out by a few rogue elements, holds no water
and cannot be justified.

Similar exercises were carried out examining other forms
of financial malfeasance, including Forex manipulation and specifically LIBOR
criminality.

The latter area of wrongdoing was amplified and
illuminated by the recent conviction of the broker Tom Hayes whose bizarre and
dysfunctional behaviour at Southwark Crown Court, even while he was standing
trial for his criminal wrongdoing became subject to discussion.

His arrogance
and the degree of contempt he demonstrated for prosecuting counsel and the jury
was described as ‘truly breathtaking’

My colleague who attended the trial, described Hayes as
appearing aghast that he should be standing in the dock, proving, as my friend
said, how little he really understood of the moral standards which could and
should be expected of people who trade in those markets that will have a strong
impact on other people’s investments and savings, and described Hayes as
possessing no moral or ethical dimension at all.

One workshop which I found particularly revealing, and
from which I am still trying to extricate my emotions was the break-out session
hosted by members of the SME Alliance.

This is an organisation made up of ordinary people who
have had the misfortune to be defrauded out of millions of pounds by the major
banks, and from whom they are seeking redress. Their excellent website, www.smealliance.orggives significant information about them and
their campaigns.

I listened with mounting horror and a feeling of growing
nausea, while examples of massive conspiracies to defraud small and medium size
businesses were outlined in cryptic detail.

Good honest (but possibly
unsophisticated) businessmen being inveigled into commercial relationships with
banks, at the same time as seeking commercial lending to enhance and develop
their already successful businesses.

Particularly nauseating was evidence of the criminal
defrauding (I refuse to use the weasel words ‘mis-selling’) achieved through
the use of little-understood and unwanted derivative instruments.

In the end, I sat there, open-mouthed while evidence
against the same old usual scum-bag financial institutions, was unrolled, and a
lengthy list of agencies, all apparently dedicated to dealing with fraud and
financial crime, lamely sought to explain why they were powerless to help these
victims.

This was followed by a lengthy list of names of major law
firms, and Big 5 accounting firms who were willing to join with these pariah
banks to bring complex and expensive legal actions against these victims,
bankrupting them, forcing them from their homes, repossessing properties they
had worked for years to create, while all the time, the regulators and the
other agencies, including to my shame and regret, certain spineless police
forces, stood by and sought to justify their inaction.

At one stage, we were shown how banks ritually and
deliberately take transcripts of telephone calls made between complainants and
the bank, and deliberately and systematically go through these conversations,
re-editing them and reproducing them in a format which is much more favourable
to the bank.

I mean, occasionally it can be difficult to interpret a
specific word or even part of a sentence uttered on a bad telephone line, but
this was evidence of routine re-editing that had gone on, page after page after
page, suppressing conversation which put the bank in a bad or critical light, and
purporting to be documentary evidence as to the truth of a conversation.

These documents were blatant forgeries, and at one point,
not being able to remain quiet any longer, I burst out in my anger ‘These are
nothing but downright forgeries, and these people have uttered them’.

These documents had been used against these victims
during the course of legal proceedings brought against them by the banks, and
specifically designed to damage them.

They are primary proof of a conspiracy to
pervert the course of justice by the banks, and any judge worth his salt would
see through them in an instant, but any time one of these victims ever gets
within sniffing distance of a settlement with one of these mafia banks, then
they are hit with huge gagging orders as part of the settlement process,
denying them the right to use these documents.

I could go on and report more, but I urge you to go to
the website and read it and spend time on engaging with its contents. These
good people deserve all the help they can get but there is a massive army of
professional lawyers, accountants, insolvency practitioners, and bank
consultants out there, weasels and vermin growing fatter on the money they are
being paid to maintain this concerted financial attack on some of the most
entrepreneurial people of our era. You would think that these professionals
would have some shame at such dishonest actions, but there is no apparent shame
evidently in earning fees culled from the misery of others, and predicated by
crimes of such meanness and damaging magnitude that even Al Capone would blush
for shame.

I was asked to speak at a break-out workshop which looked
at the outcome from the HSBC Mexican money laundering affair, and what lessons
we could draw from the entire episode.

I was particularly fortunate to be able make use of a
detailed document issued by the US authorities who had supervised the deferred
prosecution agreement against HSBC.

What I sought to achieve was to demonstrate how over a
period of years, HSBC had routinely and deliberately under-resourced and
under-valued any attempts to implement decent and workable anti-money
laundering procedures and processes.

I made the point that in my opinion, this was a
deliberate decision, predicated by the knowledge that the British financial
regulators, the FSA and latterly, the FCA were unlikely to do anything to force
HSBC to change.

I quoted from the US document;

“...HSBC Bank
USA violated the BSA by failing to maintain an effective anti-money laundering
program and to conduct appropriate due diligence on its foreign correspondent
account holders.

“...A four-count felony criminal information was filed today in federal
court in the Eastern District of New York charging HSBC with willfully failing
to maintain an effective anti-money laundering (AML) program, willfully failing
to conduct due diligence on its foreign correspondent affiliates, violating
IEEPA and violating TWEA. HSBC has waived federal indictment, agreed to
the filing of the information, and has accepted responsibility for its criminal
conduct and that of its employees.

“...The
record of dysfunction that prevailed at HSBC for many years was
astonishing. Today, HSBC is paying a heavy price for its conduct, and,
under the terms of today’s agreement, if the bank fails to comply with the
agreement in any way, we reserve the right to fully prosecute it.

“....
“HSBC’s blatant failure to implement proper anti-money laundering controls
facilitated the laundering of at least $881 million in drug proceeds through
the U.S. financial system.

“...,
this financial institution is being held accountable for turning a blind eye to
money laundering that was occurring right before their very eyes.

“... 2006
to 2010, HSBC Bank USA severely understaffed its AML compliance function and
failed to implement an anti-money laundering program capable of adequately
monitoring suspicious transactions and activities from HSBC Group Affilliates,
particularly HSBC Mexico, one of HSBC Bank USA’s largest Mexican
customers. This included a failure to monitor billions of dollars in
purchases of physical U.S. dollars, or “banknotes,” from these
affiliates. Despite evidence of serious money laundering risks associated
with doing business in Mexico, from at least 2006 to 2009, HSBC Bank USA rated
Mexico as “standard” risk, its lowest AML risk category. As a result,
HSBC Bank USA failed to monitor over $670 billion in wire transfers and over
$9.4 billion in purchases of physical U.S. dollars from HSBC Mexico during this
period, when HSBC Mexico’s own lax AML controls caused it to be the preferred
financial institution for drug cartels and money launderers.

“...,
identified multiple HSBC Mexico accounts associated with BMPE activity and
revealed that drug traffickers were depositing hundreds of thousands of dollars
in bulk U.S. currency each day into HSBC Mexico accounts. Since 2009, the
investigation has resulted in the arrest, extradition, and conviction of
numerous individuals illegally using HSBC Mexico accounts in furtherance of
BMPE activity.

What was
being amply demonstrated here was the cynical and deliberate flouting of UK and
US laws to help to prevent and forestall money laundering. It was typical of
the kind of financial crimes being routinely committed by a wide cross-section
of the UK and the US banking system, and it was the subject of wide discussion
among those attending the workshop.

For the
first time, I found routine agreement among delegates that the banking industry
had become synonymous with organised crime. Many otherwise more conservative
attendees expressed their grave concern and their repugnance at the way in which
so many of our most famous banking names were now behaving. It is becoming very
much harder to believe that the banks will be able to rely on the routine
support they have traditionally enjoyed from most ordinary members of the
public.

The
election of Jeremy Corbyn to the leadership of the labour Party means that
banking crime and financial fraud will now become an electoral issue.

Hitherto,
the love affair between Gordon Brown and the Square Mile was a matter of grave
embarrassment for many of us who knew better. Brown’s routine praising of the
financial sector at mansion House dinners was the stuff of many bad jokes.
These were exacerbated by the relationship between Ed Balls and some very
dubious practitioners in the development of the PFI relationships. During this
period, it seemed like the labour Party were openly supporting the bad practices
of the City.

But now,
the new Labour leadership will focus the attention of the electorate on the
relationship between the Tory party and their very crooked friends in the City,
and the degree of protection that the Square Mile gangsters and their Consiglieri,
their Capos, and their Godfathers will become much more identifiable. Bank
crime will now become much more identifiable as a City practice and their
friends in the Tories will be seen as being primary beneficiaries.

The
spotlight of political focus is now about to be shone brightly on the dark
alleys and stews of the Square Mile, as well as in the dining rooms and the
dealing rooms where these crooked vermin gather.

4 comments:

You say "Speaker after speaker addressed the implications of the scandalous level of PPI fraud…"

You're hyping things up. It's just an example of a huge compliance risk for tiny profit. And if that's hugely – which you make it sound like – then I feel reassured.

Most of missold PPIs will have been by independent IFAs. Individual bank employees may have needed that extra sale in order to get their bonus at the end of the month, and thought it would do no harm; unfortunately, the banks are still liable, particularly if the IFAs go out of business

About Me

Having spent my career dealing with financial crime, both as a Met detective and as a legal consultant, I now spend my time working with financial institutions advising them on the best way to provide compliance with the plethora of conflicting regulations and laws designed to prevent and forestall money laundering - whatever that might be! This blog aims to provide a venue for discussion on these and aligned issues, because most of these subjects are so surrounded by disinformation and downright intellectual dishonesty, an alternative mouthpiece is predicated. Please share your views with what is published here from time to time!